Finance Minister Pranab Mukherjee today announced allocation of Rs 10,000 crore to the National Bank for Agriculture and Rural Development (NABARD) for refinancing regional rural banks (RRBs) to disburse short-term crop loans to small and marginal farmers in the Union Budget announced today
The short-term crop loans scheme offering 7% interest rate per annum would continue during the next fiscal and those farmers who repay in time would continue to get crop loans at 4% interest rate.
In order to reduce post-harvest losses, he announced that farmers would also be eligible to get post-harvest loans up to six months at 4% interest rate provided they keep their produce in warehouses.
Stating that Kisan Credit Card (KCC) is an effective instrument for making credit available to farmers, the minister said that the KCC scheme will be modified to make the KCC smart card to be used at ATMs.
The minister set aside a sum of Rs 200 crore for incentivising scientific research to raise farm yields and develop seed varieties that are resistant to climate change.
Pointing out that water scarcity could threaten agriculture production in the coming decade, Mukherjee felt the need to dovetail micro-irrigation scheme with water harvesting scheme.
He said structural changes are being made to the Accelerated Irrigation Benefit Programme (AIBP) to boost investment in irrigation projects.
The minister stepped up allocation for AIBP by 13% to Rs 14,242 crore. He announced that a government-owned irrigation and water resources company would be operationalised in 2012-13 to mobilise large resources to fund irrigation projects.
To boost food processing sector, Mukherjee announced a new centrally sponsored scheme National Mission on Food Processing that would be started in cooperation with the state governments in 2012-13.
